Correlation Between SPDR SPASX and IShares Asia
Can any of the company-specific risk be diversified away by investing in both SPDR SPASX and IShares Asia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SPDR SPASX and IShares Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SPASX 200 and iShares Asia 50, you can compare the effects of market volatilities on SPDR SPASX and IShares Asia and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SPDR SPASX with a short position of IShares Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SPASX and IShares Asia.
Diversification Opportunities for SPDR SPASX and IShares Asia
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPDR and IShares is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SPASX 200 and iShares Asia 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Asia 50 and SPDR SPASX is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SPDR SPASX 200 are associated (or correlated) with IShares Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Asia 50 has no effect on the direction of SPDR SPASX i.e., SPDR SPASX and IShares Asia go up and down completely randomly.
Pair Corralation between SPDR SPASX and IShares Asia
Assuming the 90 days trading horizon SPDR SPASX 200 is expected to under-perform the IShares Asia. In addition to that, SPDR SPASX is 1.05 times more volatile than iShares Asia 50. It trades about -0.01 of its total potential returns per unit of risk. iShares Asia 50 is currently generating about 0.13 per unit of volatility. If you would invest 10,866 in iShares Asia 50 on September 12, 2024 and sell it today you would earn a total of 278.00 from holding iShares Asia 50 or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPDR SPASX 200 vs. iShares Asia 50
Performance |
| Timeline |
| SPDR SPASX 200 |
| iShares Asia 50 |
SPDR SPASX and IShares Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SPASX and IShares Asia
The main advantage of trading using opposite SPDR SPASX and IShares Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SPASX position performs unexpectedly, IShares Asia can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IShares Asia will offset losses from the drop in IShares Asia's long position.| SPDR SPASX vs. SPDR SPASX 200 | SPDR SPASX vs. SPDR SPASX 50 | SPDR SPASX vs. SPDR MSCI World | SPDR SPASX vs. SPDR Dow Jones |
| IShares Asia vs. ETFS Morningstar Global | IShares Asia vs. BetaShares Geared Equity | IShares Asia vs. VanEck Vectors Australian | IShares Asia vs. SPDR SPASX 200 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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